On February 10, 2022, the U.S. Senate approved the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”). As one might expect based on the name, the Act prohibits employers from requiring employees to arbitrate claims involving sexual harassment or assault. The Act is also retroactive, which means it voids mandatory arbitration clauses in existing contracts that could impede employees from litigating such claims against their employers.  Once the Act is signed into law, which is expected to happen quickly, employees who have been subjected to sexual misconduct in the workplace will have the option to choose between court and arbitration, even if an employment contract purports to require arbitration. 

In general, it is not uncommon for employment agreements to require arbitration of all employment-related disputes between employers and employees. Arbitration provides an alternative form of dispute resolution that is often faster and more cost-effective for both parties compared to litigation. However, arbitration proceedings are generally confidential, which can be a windfall to misbehaving employers to the detriment of employees who have been victimized. 

In light of this, many commentators have contended that mandating arbitration in the context of workplace sexual misconduct goes a step too far, as it operates to keep such claims out of the courts and away from the public eye. These types of limitations can create additional hurdles for employees seeking to remedy acts of inappropriate and offensive behavior in the workplace.   In response to these concerns, the Act ensures that survivors of workplace sexual assault and harassment have adequate access to the courts, where proceedings are generally public, in order to address misconduct in the workplace.

Employers should take note of the new law and ensure that employment agreements are drafted and interpreted accordingly. Additionally, employers should prioritize maintaining workplaces that are free from sexual harassment and related misconduct, in order to avoid employee claims altogether. Organizations should review their employee handbooks and other policies prohibiting harassment, discrimination, and sexual harassment in the workplace to ensure that proper reporting, investigation, and anti-retaliation protocols are in place.  These policies send a message to employees about expected behavior and should clearly and unambiguously communicate that there are serious consequences for violations.  In the event of a claim against the organization, they also help to demonstrate that the organization takes its obligations seriously. Once comprehensive policies are in place, it is equally important to properly train employees, particularly managers and supervisors, about their roles and responsibilities under those policies. To that end, employers should also make sure that they are complying with their statutory sexual harassment training requirements.

[View source.]